The directorsenteredintoacontractonbehalf

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Unformatted text preview: vires. On the other hand, the powers of the company are ancillary to the main objects and are given to the company to enable it to carry on its primary objects or businesses. Ultra vires Ultra vires Common law doctrine y contract void y Ashbury Railway v Riche y y Constructive notice – deemed knowledge of constitution y y y Ashbury Railway Carriage & Iron Co v Riche The objects of the company, as stated in the memorandum included: ‘to make, and sell, and lend or hire, railway carriages and wagons, and all kinds of railway plant, fittings, machinery, and rolling stock; to carry on the business of mechanical engineers and general contractors’. The directors entered into a contract on behalf of the company for the purchase of a concession to construct a railway. The House of Lords held that construction of railways was not within the objects of the company as stated in the memorandum. Even if...
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